So much for a devastating summer drought across the Corn Belt. While some pockets are desperate for precipitation, other areas are thriving, leading the market—and growers—to expect big yields this fall.
“The crop looks great in North Dakota—but they got rain, and it never got hot there,” said Jerry Gulke, president of the Gulke Group and a farmer in Illinois.
It’s wreaking havoc on prices, which climbed as high as $4.50 for corn this summer and then collapsed, along with soybeans, thanks to the timely rains.
This week, for example, corn posted a new low for December corn, November contract beans lost 68 cents, and on Friday, December wheat was down 10 cents before closing 9 cents higher for the week, which is a key reversal upwards.
“Wheat is so negative because of the surplus we have—a billion bushels and how it’s going to compete with corn for a feed grain,” said Gulke. "But wheat has a tendency to turn and turn with a vengeance."
Other ag commodities—including cattle and hogs—also struggled this week. “All of agriculture is in a downtrend, which is not good,” Gulke said.
And current weather forecasts are not helping prices, but rather hurting them. “These weather markets are treacherous,” Gulke said.
The only consolation for farmers now: the expected volume of their harvest.
“We had opportunities to sell some grain at a profit and that went away. But you had to be pretty gutsy to do that when the forecast says you’re not going to get a crop,” he said. “Of course, now that’s collapsed. The only good news for the bottom line is that we’re going to multiply price by 20 bushels more (per acre) on corn than we thought we were going to get and may be 2 to 3 bushels (per acre more) in beans.”
Listen to his full comments here: